ASA Limited Annual Report 2007 ASA Limited Annual Report and Financial Statements November 30, 2007 Directors Robert J.A. Irwin (U.S.A.) Henry R. Breck (U.S.A.) Harry M. Conger (U.S.A.) Chester A. Crocker (U.S.A.) Joseph C. Farrell (U.S.A.) James G. Inglis (South Africa) Malcolm W. MacNaught (U.S.A.) Robert A. Pilkington (U.S.A.) A. Michael Rosholt (South Africa) Contents Chairman’s report 2 Certain investment policies and restrictions 5 Report of independent registered public accounting firm 5 Schedule of investments 6 Portfolio changes 7 Statement of assets and liabilities 8 Statement of operations 9 Statements of changes in net assets 10 Notes to financial statements 11 Financial highlights 13 Supplementary information 13 Certain tax information for U.S. shareholders 14 Dividend reinvestment and stock purchase plan 15 Privacy notice 16 Direct registration system 16 Proxy voting 17 Form N-Q 17 Common share repurchases 17 Annual CEO certification 17 Forward-looking statements 17 Board of directors and officers 18 Officers Robert J.A. Irwin, Chairman, President and Treasurer David J. Christensen, Vice President-Investments Paul K. Wustrack, Jr., Secretary and Chief Compliance Officer Executive Offices 11 Summer Street Buffalo, NY, 14209 U.S.A. Registered Office Canon’s Court 22 Victoria Street Hamilton HM 12, Bermuda Independent Registered Public Accounting Firm Ernst & Young LLP, New York, NY, U.S.A. Counsel Appleby, Hamilton, Bermuda Kirkpatrick & Lockhart Preston Gates Ellis LLP, Washington, DC, U.S.A. Custodian JPMorgan Chase Bank, N.A. New York, NY, U.S.A. Subcustodian FirstRand Bank Limited Johannesburg, South Africa Fund Accountants Kaufman Rossin Fund Services, LLC Miami, FL, U.S.A. Shareholder Services LGN Group, LLC Florham Park, NJ, U.S.A. (973) 377-3535 Transfer Agent Computershare Trust Company, N.A. 525 Washington Boulevard, Jersey City, NJ 07310, U.S.A. Website-www.asaltd.com The Semi-annual and Annual Reports of the Company and the latest valua- tion of net assets per share may be viewed on the Company’s website or may be requested from LGN Group, LLC, Lawrence G. Nardolillo, C.P.A., P.O. Box 269, Florham Park, New Jersey 07932 (973) 377-3535. Shareholders are reminded to notify Computershare of any change of address. 1 Chairman’s report (unaudited) At November 30, 2007 the Company’s net asset value was $84.77 per share. The closing price of the Company’s shares on the New York Stock Exchange was $73.25 at November 30, 2007, which represented a 13.6% discount to the net asset value. This compares with the net asset value of $74.19 per share at November 30, 2006, at which time the closing price was $64.21, a discount of 13.5% to the net asset value. The Company’s total return, including reinvested divi- dends, in fiscal 2007 was 19.2% based on net asset value (“NAV”) and 19.0% based on the market price of the Company’s shares. This return in fiscal 2006 was 34.9% based on NAV and 31.5% based on market price. Net investment income for the fiscal year ended November 30, 2007 was $1.11 per share, as compared to $.76 per share for the fiscal year ended November 30, 2006. Realized gain from investments, including net realized gain (loss) on investments from foreign currency transac- tions for the fiscal year ended November 30, 2007, was $9.03 per share, as compared to $1.35 per share for the fis- cal year ended November 30, 2006. Dividends totaling $2.30 and $.90 per share were paid or declared during the fiscal years ended November 30, 2007 and November 30, 2006, respectively. (See Note 1.E. Dividends to Shareholders (page 11) and Certain tax infor- mation for U.S. shareholders (pages 14 and 15) for further comments.) Chart 1: Historical Dividends (ASA Limited) $2.30 $1.20 $0.80 $0.80 $0.80 $0.80 $0.60 $0.60 $0.55 $0.90 $0.90 $2.50 $2.00 $1.50 $1.00 $0.50 $- 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Trends in the Gold Market The continued strength of gold and platinum prices has led to an increase in dividend payments from many of the mining companies whose shares are held in our portfolio. Capital gains realized from the Company’s diversification away from South African gold producers has further prompted us to increase the November dividend payment. Moreover, expenses have declined as a percentage of our net assets. The Company’s expense ratio for 2007 was 0.53%, which is amongst the lowest in the industry. facilitate additional gold purchases by Asian investors. Earlier versions of ETFs listed in Japan were not able to hold physi- cal bullion, limiting their interest amongst investors. We believe that the development of these investment vehicles has facilitated the investment in gold for many investors and has been a significant factor in the improved supply / demand fun- damentals for the sector. Chart 2: Gold Bullion Holdings in Exchange Traded Funds Millions ounces 30 iShares COMEX Gold (USA) streetTRACKS Gold Trust (USA) 25 NewGold Issuer Ltd (JSE) Lyxor Gold Bullion Securities (LSE) Gold Bullion Securities Ltd (ASX) 20 15 10 5 - Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Source: ASA Research During the course of the last several months, many precious metals analysts have labeled this cycle, “The Perfect Storm” as numerous different economic issues appear to have coa- lesced into an environment that has been very supportive of higher gold prices. The combination of declining interest rates, rising general commodity prices, fears of economic meltdown as a result of the sub-prime lending fiasco and declining global gold production could not make for a stronger case of holding gold as an investment. Recent statements from the U.S. Federal Reserve accompa- nying the recent cuts in lending rates have been increasingly ominous with the Federal Open Market Committee noting “deterioration in financial conditions” and “strain in financial markets” as reasons behind the lowering of interest rates. The factors driving these comments have served to increase the tensions in the financial markets. Interest rates on government bonds have fallen sharply as investors, looking to avoid unknown credit quality of corporate and bank securities, have resorted to government paper as a safe-haven. All of these issues have tended in the near-term to provide support for the gold price above the $800 per ounce level. In recent weeks the price has moved to record levels and on January 14th was trading as high as $914.00 per ounce. Longer term, the out- look for the gold price will be influenced by the duration of the current slowdown in the demand for commodities as well as the outlook for jewelry demand. Should the current eco- nomic malaise turn into a full-blown recession, which does not yet appear likely, one would have to anticipate that a gen- eral decline in jewelry demand could be a consequence. Gold Share Market Rising investment demand for gold, especially in the form of the new exchange traded funds (“ETF”) shares, has helped to support the gold price in the last two years. During early 2008, a new gold ETF is to be listed in Japan, which should Despite the dramatic increase in the gold price, rising capi- tal costs needed to develop a new gold mining operation com- bined with increases in operating costs have resulted in only minimal improvements in the economics of gold mining oper- 2 ations during the last several years. Moreover, the time required to develop, permit and commence construction of a new project has lengthened considerably due to increased activism on the part of environmentalists. The result of these trends will be a slowing in the rate of new mine development that is likely to sustain a higher gold price. The suspension of the Galore Creek project of NovaGold Resources Inc. and the delay in developing the Rosia Montana Project of Gabriel Resources Limited in Romania are just two examples of these trends and the effect on the industry. The problems associated with developing new mining operations and the rising operat- ing costs at almost all gold producers have negatively affected the share price performance of most gold producers during the last year. Were it not for these factors, we would have antici- pated much better results from the gold mining shares given the strength witnessed in the gold price during the year. The Platinum Market Platinum, in addition to being a precious metal, has a num- ber of unique industrial attributes that make the metal irre- placeable in many applications. The continued growth in demand from the automotive industry for autocatalysts, for example, has driven prices for platinum to all-time highs in recent months. Despite this, the poor operating performance from the South African platinum mines has constrained their share price performance in recent months. While our holdings in the shares of Anglo American Platinum and Impala Platinum have generally underper- formed the gold mining companies during the last year, we continue to view these investments as strategic in nature, as there are very few platinum producers in the world. In an industry where a significant portion of share price perform- ance has been driven by merger and acquisition activity, we would be shortsighted to reduce our holdings in such a strate- gically significant area. Portfolio Matters During the last year, the Company accelerated the diversifi- cation of the portfolio outside of South African investments. At November 30, 2007, the Company held 20.2% of its net assets in South African gold shares versus 43.5% at year-end 2006. The decrease in these holdings was driven by a combination of sales of significant portions of our holdings in AngloGold Ashanti, Gold Fields and Harmony Gold Mining. The relative weight of these holdings in the portfolio was further reduced as a result of lower relative share price performance from these investments during the year. As these investments were acquired many years ago and, over time, have performed well, we also realized significant capital gains in the process of diver- sifying the portfolio. A portion of these gains were distributed to shareholders as part of the November 2007 dividend. We have met with the management of each of these companies once, if not more often, during the course of the year. While management continues to do a very good job of operating these assets, we believe that there are better growth investments, with lower operating risks, to be found elsewhere. Indeed, South African miners have also been divesting out of South Africa. In 2007, 60% of AngloGold Ashanti’s and 30% of Gold Fields’ production was non-South African. For the past several years the proceeds from the sales of the South African gold shares have been reallocated to investments in gold producers in Canada, Australia and Latin America, to shareholder dividends and, to a lesser extent, gold bullion. We continue to believe that holding a large position in the platinum producers is a long-term strategy that will be rewarded over time. The platinum producers, largely South African based companies, are among the best long-term hold- ings in the portfolio. With the decline in the South African gold share holdings, the shares of platinum miners now repre- sent over 20% of the portfolio. Our largest investment is our holding in Newcrest Mining Limited, Australia’s largest gold mining company, at 11% of the Company’s net assets compared to the Company’s largest position at November 30, 2006—Gold Fields Limited (South Africa) at 22% of net assets. Chart 3: Asset Allocation 11/30/2007 United States Gold Miners 3.2% Australian Gold Miners 11.0% Cash and Other, Net 2.5% Gold ETF 1.9% Channel Island Miners 6.3% Other Miners 9.7% South African Gold Miners 20.2% Canadian Gold Miners 18.8% Latin American Miners 6.2% Platinum Miners 20.2% The Company has acquired new positions in Agnico-Eagle Mines Ltd. and NovaGold Resources, both headquartered in Canada. Agnico-Eagle Mines is one of the lowest cost gold producers in the world as a result of its by-product silver and zinc production at the La Ronde Mine in Canada. NovaGold Resources is a smaller position that was recently purchased. NovaGold maintains a significant interest in two of the largest undeveloped gold projects in the world and is the only development asset in the portfolio. As a result of the dramatic consolidation that has taken place in the industry, low cost, large undeveloped gold deposits in attractive locations are rare assets. The Company’s largest investments in the platinum sector are the shares of Anglo Platinum, the world’s largest producer of platinum group metals, at 9.1% of net assets, followed by the shares of Impala Platinum at 7.4% of net assets. Both com- panies have produced good investment results and the divi- dends from these two companies account for more than half of the Company’s annual investment income. Although the majority of the diversification from South African gold producers is now complete, we envision that the Company will continue to look for new investment opportuni- ties within the precious metals sector during the coming year. Since most new gold deposits are being discovered outside of 3 South Africa, we will continue to evaluate a broad spectrum of investment opportunities around the globe for potential inclu- sion in the portfolio. As we have diversified out of South African gold produc- ers, the Company has realized greater levels of capital gains than it has in the past and will likely continue to do so in the future. As this occurs, shareholders and their advisors are encouraged to review the impact of the U.S. federal income tax rules generally described on pages 14 and 15 of this Annual Report. * * * The Annual General Meeting of Shareholders will be held on Thursday, March 6th, 2008, at 10:00 a.m. at the offices of Kirkpatrick & Lockhart Preston Gates Ellis LLP, 599 Lexington Avenue, 32nd Floor, New York, New York, USA. We look forward to your attendance. ROBERT J.A. IRWIN, Chairman, President and Treasurer January 14, 2008 4 Certain investment policies and restrictions (unaudited) The following is a summary of certain of the Company’s investment policies and restrictions and is subject to the more complete statements contained in documents filed with the Securities and Exchange Commission. The Concentration of Investments in a Particular Industry or Group of Industries. It is a fundamental policy (i.e., a policy that may be changed only by shareholder vote) of the Company that at least 80% of its total assets be (i) invested in common shares or securities convertible into com- mon shares of companies engaged, directly or indirectly, in the exploration, mining or processing of gold, silver, platinum, diamonds or other precious minerals, (ii) held as bullion or other direct forms of gold, silver, platinum or other precious minerals, (iii) invested in instruments representing interests in gold, silver, platinum or other precious minerals such as cer- tificates of deposit therefor, and/or (iv) invested in securities of investment companies, including exchange traded funds, or other securities that seek to replicate the price movement of gold, silver or platinum bullion. Compliance with the percent- age limitation relating to the concentration of the Company’s investments will be measured at the time of investment. If investment opportunities deemed by the Company to be attractive are not available in the types of securities referred to in the preceding paragraph, the Company may deviate from the investment policy outlined in that paragraph and make temporary investments of unlimited amounts in securities issued by the U.S. Government, its agencies or instrumental- ities or other high quality money market instruments. The Percentage of Voting Securities of any one Issuer that the Company May Acquire. It is a non-fundamental policy (i.e., a policy that may be changed by the Board of Directors) of the Company that the Company shall not purchase a secu- rity if, at the time of purchase, more than 20% of the value of its total assets would be invested in securities of the issuer of such security. Report of independent registered public accounting firm To the Board of Directors and Shareholders of ASA Limited: We have audited the accompanying statement of assets and liabilities of ASA Limited (the “Company”), including the schedule of investments, as of November 30, 2007, and the related statement of operations and supplementary information for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements, supplementary information and financial highlights are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements, supplementary informa- tion and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the finan- cial statements, supplementary information and financial high- lights are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of inter- nal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effective- ness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, supple- mentary information and financial highlights, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. Our procedures included confirmation of securi- ties owned as of November 30, 2007 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements, supplementary information and financial highlights referred to above present fairly, in all material respects, the financial position of the Company at November 30, 2007, the results of its operations and supplementary information for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. gener- ally accepted accounting principles. New York, New York January 14, 2008 5 Schedule of investments November 30, 2007 Name of Company Gold investments Common shares of gold mining companies Australia Newcrest Mining Limited – ADRs Canada Agnico-Eagle Mines Limited Barrick Gold Corporation Goldcorp Inc. NovaGold Resources Inc. (1) Yamana Gold Inc. Channel Islands Randgold Resources Limited – ADRs Latin America Compania de Minas Buenaventura – ADRs South Africa AngloGold Ashanti Limited Gold Fields Limited Harmony Gold Mining Company Limited – ADRs (1) United States Newmont Mining Corporation Total gold mining companies (Cost – $186,303,291) Exchange traded fund – gold United States streetTRACKS Gold Trust (1) Total exchange traded fund – gold (Cost $13,340,000) Total gold investments (Cost $199,643,292) Platinum investments Common shares of platinum mining companies South Africa Anglo Platinum Limited Impala Platinum Holdings Limited United Kingdom Lonmin PLC – ADRs Total platinum investments (Cost $17,814,290) Other investments Common shares of other mining companies United Kingdom Anglo American plc Total other investments (Cost $7,752,824) Total investments (Cost $225,210,406) (2) Cash, cash equivalents, receivables, and other assets less liabilities Net assets (1) Non-income producing security. Number of Shares Market Value Percent of Net Assets 3,000,000 $ 89,572,032 11.0% 700,000 1,125,000 1,500,000 250,000 1,788,000 33,684,000 45,573,750 48,615,000 2,457,500 22,993,680 153,323,930 1,450,000 51,011,000 900,000 50,247,000 1,745,894 4,409,977 666,400 520,368 200,000 520,100 1,722,400 450,000 1,164,800 85,147,251 72,544,122 6,957,216 164,648,589 25,857,086 534,659,637 15,464,000 15,464,000 550,123,637 74,213,743 59,952,044 134,165,787 30,065,596 164,231,383 78,709,384 78,709,384 793,064,404 20,725,328 4.1 5.6 6.0 0.3 2.8 18.8 6.3 6.2 10.4 8.9 0.9 20.2 3.2 65.7 1.9 1.9 67.6 9.1 7.4 16.5 3.7 20.2 9.7 9.7 97.5 2.5 $813,789,732 100.0% (2) Cost of investments shown approximates cost for U.S. federal income tax purposes, determined in accordance with U.S. federal income tax principles. Gross unrealized appreciation of investments and gross unrealized depreciation of investments at November 30, 2007 were $568,166,723 and $312,725, respectively, resulting in net unrealized appreciation on investments of $567,853,998. ADR – American Depository Receipt There is no assurance that the valuations at which the Company’s investments are carried could be realized upon sale. The notes to the financial statements form an integral part of these statements. 6 Portfolio statistics November 30, 2007 Country breakdown* South Africa Canada United Kingdom Australia Channel Islands Latin America United States 36.7% 18.8% 13.4% 11.0% 6.3% 6.2% 5.1% * Country breakdowns, which are based on company domiciles, are expressed as a percentage of net assets. Portfolio changes during the year ended November 30, 2007 (unaudited) Number of Shares Increase Decrease Agnico-Eagle Mines Limited Anglo American plc AngloGold Ashanti Limited Barrick Gold Corporation Goldcorp Inc. Gold Fields Limited Harmony Gold Mining Company Limited Harmony Gold Mining Company Limited – ADRs Meridian Gold Inc. NovaGold Resources Inc. Randgold Resources Limited – ADRs streetTRACKS Gold Trust Yamana Gold Inc. 115,200 500,000 3,950,000 292,459 1,500,000 600,000 700,000 200,000 600,000 250,000 550,000 200,000 1,788,000(1) (1) Received in exchange for shares of Meridian Gold Inc. as result of merger, effective October 2007. 7 Statement of assets and liabilities November 30, 2007 Assets Investments, at market value (cost $225,210,406) Cash and cash equivalents Dividends and interest receivable Other assets Total assets Liabilities Accounts payable and accrued liabilities Nonqualified pension liability Liability for retirement benefits due to current and future retired directors Total liabilities Net assets Common shares $1 par value Authorized: 30,000,000 shares Issued & Outstanding: 9,600,000 shares Share premium (capital surplus) Undistributed net investment income Undistributed net realized (loss) from foreign currency transactions Undistributed net realized gain on investments Net unrealized appreciation on investments Net unrealized gain on translation of assets and liabilities in foreign currency Net assets Net assets per share The closing price of the Company’s shares on the New York Stock Exchange on November 30, 2007 was $73.25. The notes to the financial statements form an integral part of these statements. $793,064,404 21,830,764 364,321 208,252 815,467,741 251,051 651,967 774,991 1,678,009 $813,789,732 $ 9,600,000 21,249,156 54,890,187 (93,128,765) 252,781,113 567,853,998 544,043 $813,789,732 $84.77 8 Statement of operations Year ended November 30, 2007 Investment income Dividend income (net of foreign withholding taxes of $262,116) Interest income Total investment income Expenses Shareholder reports and proxy expenses Directors’ fees and expenses Provision for retirement benefits due to current and future retired directors Salaries and benefits Other administrative expenses Fund accounting Transfer agent, registrar and custodian Professional fees and expenses Insurance Other Total expenses Net investment income Net realized gain from investments Proceeds from sales Cost of securities sold Net realized gain from investments Net realized (loss) from foreign currency transactions Investments Foreign currency Net realized (loss) from foreign currency transactions Net increase in unrealized appreciation on investments Balance, beginning of year Balance, end of year Net increase in unrealized appreciation on investments Net realized and unrealized gain from investments and foreign currency transactions Net increase in net assets resulting from operations The notes to the financial statements form an integral part of these statements. $ 13,933,123 568,095 14,501,218 158,436 556,688 82,332 1,024,069 571,439 138,500 143,121 716,095 251,743 222,783 3,865,206 10,636,012 116,457,936 11,929,783 104,528,153 (17,809,089) (59,450) (17,868,539) 541,547,143 567,853,998 26,306,855 112,966,469 $ 123,602,481 9 Statements of changes in net assets Years ended November 30, 2007 and 2006 Net investment income Net realized gain from investments Net realized gain (loss) from foreign currency transactions Net increase in unrealized appreciation on investments Net increase in net assets resulting from operations Dividends payable/paid From net investment income From net realized gain from investments Net increase in net assets Net assets, beginning of year Net assets, end of year (including undistributed net investment income of $54,890,187 at end of each year) The notes to the financial statements form an integral part of these statements. 2007 $ 10,636,012 104,528,153 (17,868,539) 26,306,855 123,602,481 (10,636,012) (11,443,988) 101,522,481 712,267,251 $813,789,732 2006 $ 7,312,673 12,588,746 416,651 163,659,855 183,977,925 (7,312,673) (1,327,327) 175,337,925 536,929,326 $712,267,251 10 Notes to financial statements Year ended November 30, 2007 1. Summary of significant accounting policies ASA Limited, formerly ASA (Bermuda) Limited (“Company”), is a closed-end management investment company registered under the Investment Company Act of 1940 and is organized as an exempted limited liability company under the laws of Bermuda. The following is a summary of the Company’s significant accounting policies: A. Investments Portfolio securities listed on U.S. and foreign stock exchanges are generally valued at the last reported sales price on the last trad- ing day of the period, or the mean between the closing bid and asked prices of those securities not traded on that date. If a mean price cannot be computed due to the absence of either a bid or an asked price, then the bid price plus 1% or the asked price less 1%, as applicable, is used. Securities listed on foreign stock exchanges may be fair valued based on significant events that have occurred subsequent to the close of the foreign markets. Securities for which current market quotations are not readily available are valued at their fair value as determined in good faith by, or in accordance with procedures adopted by, the Company’s Board of Directors. If a security is valued at a “fair value”, that value is likely to be different from the last quoted price for the security. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the nature of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion rights on the security; and changes in overall market conditions. Where the Company holds securities listed on foreign stock exchanges and American Depository Receipts (“ADRs”) represent- ing these securities are actively traded on the New York Stock Exchange, the securities are fair valued based on the last reported sales price of the ADRs. The difference between cost and current value is reflected separately as net unrealized appreciation (depreciation) on invest- ments. The net realized gain or loss from the sale of securities is determined for accounting purposes on the identified cost basis. There is no assurance that the valuation at which the Company’s investments are carried could be realized upon sale. B. Cash Equivalents The Company considers all money market and all highly liquid temporary cash investments purchased with an original maturity of less than three months to be cash equivalents. C. Foreign Currency Translation Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the closing rate of exchange on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The result- ing net foreign currency gain or loss is included in the statement of operations. D. Securities Transactions and Investment Income During the year ended November 30, 2007, sales of securities amounted to $116,457,936 and purchases of securities amounted to $87,297,927. Dividend income is recorded on the ex-dividend date, net of withholding taxes, if any. Interest income is recognized on the accrual basis. E. Dividends to Shareholders Dividends to shareholders are recorded on the ex-dividend date. The reporting for financial statement purposes of dividends paid from net investment income or net realized gains may differ from their ultimate reporting for U.S. federal income tax purposes. The differences are caused primarily by the separate line item reporting for financial statement purposes of foreign exchange gains or losses. See pages 14 and 15 for certain additional tax information for U.S. shareholders. F. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. G. Basis of Presentation The financial statements are presented in U.S. dollars. 11 Notes to financial statements (continued) Year ended November 30, 2007 2. New accounting pronouncements In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). This statement clarifies the def- inition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of November 30, 2007, the Company does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period. 3. Retirement plans The Company has an unfunded non-qualified pension agreement with its Chairman, President and Treasurer, Robert J. A. Irwin, pursuant to which the Company credits amounts to a pension benefit account as determined from time to time by the Board of Directors. Through the period ended November 30, 2006, interest equivalents were credited on amounts credited to the pension benefit account at an annual rate of 3.5%. Beginning December 1, 2006, interest equivalents are credited at an annual rate of 5%. The Company recorded an expense of $107,000, including interest, for the total amount cred- ited to the pension benefit account during the year ended November 30, 2007. An amount equal to the balance in the pension benefit account will be payable in a lump sum upon termination of Mr. Irwin’s service as an officer of the Company. At November 30, 2007, the Company has recorded a liability for pension benefits due under the agreement, including interest, of $651,967. During the fiscal year ended November 30, 2007, the Company recorded an expense of $82,332 for retirement benefits due to current and future retired directors. The liability for these benefits at November 30, 2007 was $774,991. Directors of the Company qualify to receive retirement benefits if they have served the Company (and any of its predecessors) for at least twelve years prior to retirement. 4. Concentration risk It is a fundamental policy of the Company that at least 80% of its total assets be invested in securi- ties of companies engaged, directly or indirectly, in the exploration, mining or processing of gold or other precious minerals and/or in other gold and precious mineral investments. A substantial portion of the Company’s assets currently is invested in South African companies and other companies having significant assets or operations in South Africa. The Company is, therefore, subject to gold and precious mineral related risks as well as risks related to investing in South Africa, including polit- ical, economic, regulatory, currency fluctuation and foreign exchange risks. The Company currently is invested in a limited num- ber of securities and thus holds large positions in certain securities. Because the Company’s investments are concentrated in a limited number of securities of companies involved in the mining of gold and other precious minerals and related activities, the net asset value of the Company may be subject to greater volatility than that of a more broadly diversified investment company. 5. Indemnifications In the ordinary course of business, the Company enters into contracts that contain a variety of indem- nifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. 12 Financial highlights Per share operating performance Year ended November 30 2007 2006 2005 2004 2003 Net asset value, beginning of year $ 74.19 $ 55.93 $ 49.95 $ 51.54 $ 33.48 Net investment income Net realized gain from investments Net realized gain (loss) from foreign currency transactions Net increase (decrease) in unrealized appreciation on investments Net unrealized gain (loss) on translation of assets and liabilities in foreign currency Net increase (decrease) in net assets resulting from operations Dividends From net investment income From net realized gain from investments 1.11 10.89 (1.86) 2.74 — 12.88 (1.11) (1.19) .76 1.31 .04 17.05 — 19.16 (.76) (.14) .10 3.44 (2.19) 5.58 (.05) 6.88 (.20) (.70) .22 .73 (.68) (1.34) .03 (1.04) (.55) — .84 — .32 17.76 (.06) 18.86 (.80) — Net asset value, end of year $ 84.77 $ 74.19 $ 55.93 $ 49.95 $ 51.54 Market value per share, end of year $ 73.25 $ 64.21 $ 49.65 $ 44.82 $ 47.16 Total investment return(1) Based on market value per share Ratios to average net assets Expenses Net investment income Supplemental data Net assets, end of year (000 omitted) Portfolio turnover rate 19.02% 31.54% 11.40% (3.67%) 59.91% .53% 1.44% .63% 1.09% 1.15% .21% 1.03% .46% .84% 2.09% $813,790 12.07% $712,267 4.66% $536,929 7.31% $479,533 1.63% $494,784 — Per share calculations are based on the 9,600,000 shares outstanding. (1) Total investment return is calculated assuming a purchase of common shares at the current market price on the first day and a sale at the current market price on the last day of each year reported. Dividends are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Company’s dividend reinvestment plan. Supplementary information Year ended November 30, 2007 Certain fees incurred by the Company Directors’ fees Officers’ remuneration The notes to the financial statements form an integral part of these statements. $ 285,000 884,583 13 Certain tax information for U.S. shareholders (unaudited) The following is of a general nature only and is not, and should not be interpreted as, legal or tax advice to any particular U.S. shareholder of the Company. Due to the complexity and potentially adverse effect of the applica- ble tax rules summarized below. U.S. shareholders are strongly urged to consult their own tax advisors concern- ing the impact of these rules on their investment in the Company and on their individual situations. Under rules enacted by the Tax Reform Act of 1986, the Company became a “passive foreign investment company’’ (a “PFIC’’) on December 1, 1987. The manner in which these rules apply depends on whether a U.S. shareholder (1) elects to treat the Company as a qualified electing fund (“QEF’’) with respect to his Company shares, (2) for taxable years of a U.S. shareholder beginning after December 31, 1997, elects to “mark-to-market’’ his Company shares as of the close of each taxable year, or (3) makes neither election. In general, if a U.S. shareholder of the Company does not make either such election, any gain realized on the disposition of his Company shares will be treated as ordinary income. In addition, such a shareholder will be subject to an “interest charge” on part of his tax liability with respect to such gain, as well as with respect to an “excess distribution” made by the Company (as explained in the following paragraph). Furthermore, shares held by such a shareholder may be denied the benefit of any otherwise applicable increase in tax basis at death. Under proposed regulations, a “disposition” would include a U.S. taxpayer’s becoming a nonresident alien. As noted, the general tax consequences described in the preceding paragraph apply to an “excess distribution” on Company shares, which means the total distributions by the Company a shareholder receives during a taxable year that are more than 125% of the average amount it distributed for the three preceding taxable years.* If the Company makes an excess distribution in a year, a U.S. shareholder who has not made a QEF or mark-to-market election would be required to allocate the excess amount ratably over the entire holding period for his shares. That allocation would result in tax being payable at the highest applicable rate in the prior taxable years to which the distribution is allocated and interest charges being imposed on the resulting “underpayment” of taxes made in those years. In contrast, a distribution that is not an excess distribution would be taxable to a U.S. shareholder as a nor- mal dividend,** with no interest charge. If a U.S. shareholder elects to treat the Company as a QEF with respect to his shares therein for his first year he holds his shares during which the Company is a PFIC, the rules described in the preceding paragraphs generally would not apply; those rules also would not apply to a U.S. shareholder who makes the QEF election after such first year and also elects to treat his shares generally as if they were sold for their fair market value * For example, the Company paid annual dividends of $.90, $.90 and $.55 per share during 2006, 2005 and 2004, respectively, an average per year of $.7833 per share. Accordingly, any dividends during 2007 in excess of $.9792 per share (125% of $.7833) would be treated as an excess distribution for that year. (All amounts in U.S. currency.) **Because the Company is a PFIC, dividends it pays will not qualify for the 15% maximum U.S. federal income tax rate on dividends that individuals receive and instead will be taxed at rates up to 35%. 14 on the first day of the first taxable year of the Company for which the QEF election is effective, in which event the gain from such “deemed sale” would be treated as an excess distri- bution. Instead, the electing U.S. shareholder would include annually in his gross income his pro rata share of the Company’s ordinary earnings and net capital gain (his “QEF inclusion”), regardless of whether such income or gain was actually distributed. A U.S. shareholder who makes a valid QEF election will recognize capital gain on any profit from the actual sale of his shares if those shares were held as capital assets. Alternatively, if a U.S. shareholder makes a mark-to-market election with respect to Company shares for taxable years beginning on or after January 1, 1998, such shareholder would be required annually to report any unrealized gain with respect to his shares as ordinary income, and any unrealized loss would be permitted as an ordinary loss, but only to the extent of previous inclusions of ordinary income. Any gain subse- quently realized by an electing U.S. shareholder on a sale or other disposition of his Company shares also would be treated as ordinary income, but such shareholder would not be subject to an interest charge on his resulting tax liability. Special rules apply to a U.S. shareholder who held his PFIC stock prior to his first taxable year for which the mark-to-market election was effective. A U.S. shareholder with a valid QEF election in effect would not be taxed on any distributions paid by the Company to the extent of any QEF inclusions, but any distributions out of accumulated earnings and profits in excess thereof would be treated as taxable dividends. Such a shareholder would increase the tax basis in his Company shares by the amount of any QEF inclusions and reduce such tax basis by any distribu- tions to him that are not taxable as described in the preceding sentence. Special rules apply to U.S. shareholders who make the QEF election and wish to defer the payment of tax on their annual QEF inclusions. Each shareholder who desires QEF treatment must individ- ually elect such treatment. The QEF election must be made for the taxable year of the shareholder in which or with which the Company’s taxable year ends. A QEF election is effective for the shareholder’s taxable year for which it is made and all of his subsequent taxable years and may not be revoked without the consent of the Internal Revenue Service. A shareholder of the Company who first held his Company shares after November 30, 2006 and who files his tax return on the basis of a calendar year may make a QEF election on his 2007 tax return. A shareholder of the Company who first held his Company shares on or before that date may also make the QEF election on his 2007 tax return but should consult his tax advisor concerning the tax consequences and special rules that apply when a QEF election could have been made with respect to such shares for an earlier taxable year. A QEF election must be made by the due date, with exten- sions, of the federal income tax return for the taxable year for which the election is to apply. Under Treasury regulations, a QEF election is made on Internal Revenue Service Form 8621, which must be completed and attached to a timely filed income tax return in which the shareholder reports his QEF inclusion for the taxable year to which the election applies. In order to allow U.S. shareholders to make QEF elections and to comply with the applicable annual reporting requirements, the them a “PFIC Annual Company annually provides Information Statement’’ containing certain information required by Treasury regulations. In early 2008, the Company will send to U.S. shareholders the PFIC Annual Information Statement for its 2007 taxable year. Such annual information statement may be used for pur- poses of completing Form 8621. A shareholder who either is subject to a prior QEF election or is making a QEF election for the first time must attach a completed Form 8621 to his income tax return each year. Other U.S. shareholders also must attach completed Forms 8621 to their tax returns each year, but shareholders not electing QEF treatment will not need to report QEF inclusions thereon. Special rules apply to U.S. persons who hold Company shares through intermediate entities or persons and to U.S. shareholders who directly or indirectly pledge their shares, including those in a margin account. Ordinarily, the tax basis that is obtained by a transferee of property on the property owner’s death is adjusted to the property’s fair market value on the date of death (or alternate valuation date). If a U.S. shareholder dies owning Company shares with respect to which he did not elect QEF treatment (or elected such treatment after the first taxable year in which he owned shares in which the Company was a PFIC and did not elect to recognize gain, as described above), the transferee of those shares will not be entitled to adjust the tax basis in such shares to their fair market value on the date of death (or alternate valuation date). In that case, in general, the transferee of such shares will take a basis in the shares equal to the share- holder’s basis therein immediately before his death. If a U.S. shareholder dies owning Company shares for which a valid QEF election was in effect for all taxable years in such share- holder’s holding period during which the Company was a PFIC (or the shareholder made a “deemed sale election”), then the basis increase generally will be available. Dividend reinvestment and stock purchase plan Computershare Trust Company, N.A. (“Computershare’’) has been engaged to offer a dividend reinvestment and stock purchase plan (the “Plan’’) to shareholders. Shareholders may elect to participate in the Plan by signing an authorization. The authorization appoints Computershare as agent to apply to the purchase of common shares of the Company in the open mar- ket (i) all cash dividends (after deduction of the service charge described below) that become payable to such participant on the Company’s shares (including shares registered in his or her name and shares accumulated under the Plan) and (ii) any optional cash investments ($50 minimum, subject to an annual maximum of $60,000) received from such participant. For the purpose of making purchases, Computershare will commingle each participant’s funds with those of all other participants in the Plan. The price per share of shares pur- chased for each participant’s account shall be the average price (including brokerage commissions and any other costs of purchase) of all shares purchased in the open market with the net funds available from a cash dividend and any volun- tary cash payments being concurrently invested. Any stock dividends or split shares distributed on shares held in the Plan will be credited to the participant’s account. For each participant, a service charge of 5% of the com- bined amount of the participant’s dividend and any voluntary payment being concurrently invested, up to a maximum charge of $2.50 per participant plus $.03 per share, will be deducted (and paid to Computershare) prior to each purchase of shares. Shareholder sales of shares held by Computershare in the Plan are subject to a fee of $10.00 plus $.12 per share deducted from the proceeds of the sale. Additional nominal fees are charged by Computershare for specific shareholder requests such as requests for information regarding share cost basis detail in excess of two prior years and for replacement Forms 1099 older than three years. Participation in the Plan may be terminated by a participant at any time by written instructions to Computershare. Upon termination, a participant will receive a certificate for the full number of shares credited to his or her account, unless he or she requests the sale of all or part of such shares. Dividends reinvested by a shareholder under the Plan will generally be treated for U.S. federal income tax purposes in the same manner as dividends paid to such shareholder in cash. See “Certain tax information for U.S. shareholders’’ for more information regarding tax consequences of an invest- ment in shares of the Company, including the effect of the Company’s status as a PFIC. The amount of the service charge is deductible for U.S. federal income tax purposes, subject to limitations. To participate in the Plan, shareholders may not hold their shares in a “street name’’ brokerage account. Additional information regarding the Plan may be obtained from Computershare, P.O. Box 43081, Providence, RI 02940-3081. Information may also be obtained on the inter- net at www.computershare.com or by calling Computer- share’s Telephone Response Center at 1-781-575-2723 between 9:00 a.m. and 5:00 p.m., Eastern time, Monday through Friday. 15 reports or other information about the Company. This policy applies to all of the Company’s shareholders and former shareholders. We keep nonpublic personal information in a secure envi- ronment. We restrict access to nonpublic personal information to Company officers, agents and service providers who have a need to know the information based on their role in servicing or administering shareholders’ accounts. The Company also maintains physical, electronic and procedural safeguards that comply with federal regulations and established security stan- dards to protect the confidentiality of nonpublic personal information. Privacy notice The Company is committed to protecting the financial privacy of its shareholders. to process transactions, We do not share any nonpublic, personal information that we may collect about shareholders with anyone, including our affiliates, except to service and administer shareholders’ share to comply with accounts, shareholders’ requests or legal requirements or for other limited purposes permitted by law. For example, the Company may disclose a shareholder’s name, address, social security number and the number of shares owned to its administrator, transfer agent or other service providers in order to provide the shareholder with proxy statements, tax reporting forms, annual Direct registration system In December 2007, the Company initiated participation in the Direct Registration System (“DRS”), which enables shareholders to register their Company shares in book-entry form without the issuance of a physical certificate and to transfer those shares electronically. Shareholders may continue to hold stock certificates representing their shares or may convert them to book-entry shares. A brochure which describes the features and benefits of the DRS can be obtained by calling Computershare Trust Company at 1-781-575-2879. 16 Proxy voting Annual CEO certification The policies and procedures used by the Company to deter- mine how to vote proxies relating to portfolio securities and information regarding how the Company voted proxies relat- ing to portfolio securities during the twelve month period end- ed June 30, 2007 are available on the Company’s website at www.asaltd.com and on the Securities and Exchange Commission’s website at www.sec.gov. A written copy of the Company’s policies and procedures is available without charge, upon request, by calling collect (973) 377-3535. Form N-Q The Company files its schedule of portfolio holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N- Q. The Company’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Company’s Forms N-Q also may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The schedule of portfolio holdings reported on Form N-Q also is included in the Company’s financial statements for the first and third quarters of each fiscal year which are available on the Company’s website at www.asaltd.com. Common share repurchases The Company may from time to time purchase its common shares on the open market in such amounts and at such prices as the Company may deem advisable. The Company has submitted to the New York Stock Ex- change the required annual certification of the Company’s Chief Executive Officer. The Company also will include the certification of the Company’s Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as an exhibit to the Company’s Form N-CSR for the year ended November 30, 2007 to be filed with the Securities and Exchange Commission. Forward-looking statements This report contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. By their nature all forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of management’s plans to be materially different from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the performance of the com- panies whose securities comprise the Company’s portfolio, the conditions in the United States, South African and other international securities and foreign exchange markets, the price of gold, platinum and other precious minerals and changes in tax law. 17 Board of Directors and Officers of ASA Limited Directors are elected at each annual general meeting of shareholders to serve until the next annual general meeting. Officers are elected to serve one-year terms. The address of each director and officer is c/o LGN Group, LLC, P.O. Box 269, Florham Park, NJ 07932. Interested Director* Robert J.A. Irwin (80) Position held with the Company: Chairman and Treasurer since 2003; President since 2004; Director since 2003 (ASA Limited South Africa from 1987 to 2005) Other Principal Occupations During Past 5 Years: Chairman of ASA Limited South Africa from 1993 to 2005; Treasurer of ASA Limited South Africa from 1999 to 2005 Other Directorships held by Director: Former President, Chief Executive Officer and Director of Niagara Share Corporation (closed end investment company) Independent Directors Henry R. Breck (70) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1996 to 2004) Principal Occupations During Past 5 Years: Chairman and a director of Ark Asset Management Co., (registered investment adviser) Other Directorships held by Director: Director of Butler Capital Corp. (business financing) Harry M. Conger (77) Position held with the Company: Deputy Chairman (non-executive) since 2004 Director since 2004 (ASA Limited South Africa from 1984 to 2004) Principal Occupations During Past 5 Years: Chairman and CEO Emeritus of Homestake Mining Company Other Directorships held by Director: Director of Apex Silver Mines Limited Chester A. Crocker (66) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1996 to 2004) Principal Occupations During Past 5 Years: James R. Schlesinger Professor of Strategic Studies, School of Foreign Service, Georgetown University; President of Crocker Group (consultants) Other Directorships held by Director: Director of Universal Corporation, (tobacco, lumber and agri-products) United States Institute of Peace, First Africa Holdings Ltd. (investment banking), G3 Good Governance Holdings, Ltd. (consultants on geopolitical and commercial issues) and Bell Pottinger Communications USA LLC (strategic communications) Joseph C. Farrell (72) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1999 to 2004) Principal Occupations During Past 5 Years: Retired Chairman, President and CEO of The Pittston Company (coal and mining, transportation and security services) (now The Brinks Company) Other Directorships held by Director: Director of Universal Corporation (tobacco, lumber and agri-products) James G. Inglis (63) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1998 to 2004) Principal Occupations During Past 5 Years: Chairman of Melville Douglas Investment Management (Pty) Ltd. since 2002; Executive Director prior thereto. Other Directorships held by Director: Director of Coupon Holdings (Pty) Ltd. (investment company) Malcolm W. MacNaught (70) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1998 to 2005) Principal Occupations During Past 5 Years: Retired and formerly Vice President and Portfolio Manager at Fidelity Investments Other Directorships held by Director: Former director of Meridian Gold Inc. (gold mining company) Robert A. Pilkington (62) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1979 to 2005) Principal Occupations During Past 5 Years: Investment banker and Managing Director of UBS Securities LLC and predecessor companies Other Directorships held by Director: Director of Avocet Mining PLC (gold mining company) A. Michael Rosholt (87) Position held with the Company: Director since 2004 (ASA Limited South Africa from 1982 to 2005) Principal Occupations During Past 5 Years: Former Chairman of the National Business Initiative (South Africa) (non-profit organization); retired Chairman of Barlow Rand Limited (financial, industrial and mining corporation) Other Officers David J. Christensen (45) Position held with the Company: Vice President-Investments since May 2007 Other Principal Occupations During Past 5 Years: Vice President, Corporate Development, Gabriel Resources Ltd. since 2006; independent financial consultant from 2003 to 2006 and Director of Fundamental Equity Research for Credit Suisse First Boston from 2002 to 2003 Paul K. Wustrack, Jr. (64) Position held with the Company: Secretary and Chief Compliance Officer since 2004 Other Principal Occupations During Past 5 Years: Assistant U.S. Secretary of ASA Limited South Africa from 2002 to 2005, Chief Compliance Officer from 2004 to 2005; prior thereto, Special Counsel, Phillips, Lytle, Hitchcock, Blaine & Huber LLP * By reason of being an officer of the Company 18